Crafar farm appeal dismissed

Sir Michael Fay. Photo / Bay of Plenty Times

The Court of Appeal has dismissed the Sir Michael Fay led group appeal to block the sale of the 16 Crafar dairy farms to China's Shanghai Pengxin group.

In last month's hearing, lawyers for Sir Michael's Independent Crafar Farms Purchase Group argued the focus of the Overseas Investment Office's (OIO) appraisal of Shanghai Pengxin's relevant experience and acumen should be on the man in ultimate control of the corporation, billionaire Jiang Zhaobai.

They said the OIO had not analysed whether Mr Jiang's investments in sheep and soybean farms gave him the relevant experience to invest in the 16 Crafar dairy farms.

But in its decision, the Court of Appeal observed that the business experience and acumen requirement under the Overseas Investment Act was "broadly worded and flexible".

And while Mr Jiang and other leading figures in Shanghai Pengxin had no experience in dairy farming, they ensured their local subsidiary Milk NZ "entered into appropriate arrangements with others (such as Landcorp) to access industry specific experience".

The court considered that Land Information Maurice Williamson and Associate Finance Minister Jonathan Coleman - who signed off on the OIO's decision earlier this year - "were entitled to conclude that the controlling individuals had business experience relevant to the proposed investment".

The Court also noted that even if it had found the ministers' decision was deficient due Shanghai Pengxin's lack of relevant experience, the Court was "unlikely to have exercised its discretion to grant a remedy".

"In light of the ministers unchallenged conclusion that the investment would bring substantial and identifiable benefit to New Zealand, the ministers would undoubtedly decide to grant consent again if the matter was referred back to them."

The Fay group's appeal was its second legal attempt to block the purchase of the farms by the Chinese company.

It first application to the High Court for a judicial review on the grounds the economic benefits the deal would bring to New Zealand were not proved succeeded forcing the OIO and ministers to reconsider a second application from the company.

Sir Michael this morning said he felt "disenfranchised" as well as disappointed by the decision.

"We are all disappointed - especially our two Iwi members - to see this significant parcel of highly productive dairy land, pass out of New Zealand ownership," he said in a statement.

"The issue of overseas buyers aggregating large parcels of farm land is very important to our most productive export sector and I don't believe we have heard the end of the discussions raised by our group. Clearly the majority of New Zealanders have significant concerns about this issue.

"But that opinion was not enough to sway the Government or the Courts and so our group will now concentrate on business as usual on the farm."

Hardie Peni, Chairman of the Tiroa E and Te Hape B Trusts, said his Ngatirereahu Iwi and their fellow Iwi buyers Tuwharetoa, were bitterly disappointed at the decision as they had both hoped to complete a commercial transaction that would return land that had been under claim since the 1800s.

"It seems all you need to enjoy the privilege of owning New Zealand farm land is deeper pockets and some knowledge of business to become a major owner of dairy farms," said Mr Peni.

"Shanghai Pengxin still won't disclose the purchase price but I'll bet it's a pittance compared to the more than $66 million we were asked to pay for the three farms we were interested in buying from them.

"If that's the protection the law and the Government is going to give Kiwis and Iwi from deep pocketed overseas buyers then it won't be long before a whole lot more Kiwi farmers are left feeling as disenfranchised as we are at the moment."